'It all depends from what angle you look at things. Of course the PMI figure was really disappointing, but if it leads to further easing, then it is a positive,' KGI Asia chief operating officer Ben Kwong Man-bun said.

'The market reacted very positively to the co-ordinated action of the central bankers, but from another angle it was because the situation is really so bad that they could not wait and had to act together.

'If the sentiment is favourable and things are seen as positives, you can't argue with the market and have to just let it go.'

Go it did. The Hang Seng Index soared to close above the 19,000 mark for the first time in two weeks.

H shares outperformed, with the H-share index surging 8.13 per cent.

Turnover rose to the highest in a month, to HK$97.15 billion - almost 40 per cent above the six-month daily average of HK$69.8 billion.

Hong Kong stocks were catching up with big gains in US and European markets, which rose 3 to 4 per cent on Wednesday. But European and US markets opened lower yesterday, suggesting investors were seizing the opportunity to take some money off the table and implying Hong Kong shares are unlikely to add much gains when trading opens this morning.

At the same time, while still above its 12-month average, the Hang Seng Volatility Index fell below the 30-point level for the first time since August. A continued decline would imply a near-term rise in the market.

Yesterday's rally was also partly due to a short squeeze, as short sellers rushed to cover their positions following the global central bank action and Beijing's move to boost domestic liquidity by cutting for the first time since December 2008 the amount of cash lenders must keep in reserve.

'The Chinese government has some policy flexibility now but not as much as it did three years ago when it spent very aggressively to counter the global crisis,' Goldman Sachs' co-head of Asian economics, commodities and strategy research, Timothy Moe, said yesterday.

But policymakers in Beijing continue to see lacklustre prospects given the global economic drag from the sovereign debt crisis in Europe.

'The current crisis, to some extent, is more serious and challenging than the international financial crisis following the fall of Lehman Brothers,' Vice-Finance Minister Zhu Guangyao said at a Beijing forum yesterday, according to Reuters.

'At that time [in 2008], the world economy maintained overall growth and the governments, especially G20 countries, were still able to implement fiscal and monetary stimulus measures.

'But now, some countries have very difficult fiscal situations, and there is limited room to adjust monetary policies.'